New legislation passed by Congress in December will not extend employer mandated emergency paid sick and family leave provided by the Families First Coronavirus Response Act, which expired December 31st. Employers are no longer required to provide paid sick and family leave under the previous guidelines of the FFCRA. However, employers who voluntarily continue to offer FFCRA qualifying sick and family leave will continue receiving payroll tax credits until March 31, 2021.
It is important to note there is no new or additional allotment of time. Employees who have used all available leave under the FFCRA are not granted additional time off as a result of the December legislation.
Employers should contemplate COVID-19 related leave scenarios and decide whether they will continue offering COVID-related sick and family leave and consult with tax specialists for information on receiving tax benefits.
If not extending FFCRA leave, employers may wish to review their own leave policies to avoid potential spread of illness.
For Employees: Is income from FFCRA paid leave taxable? Yes. Income received in the form of paid or expanded leave will be taxed. However, stimulus income from 2020 will not be taxed.
Stay tuned for additional guidance as implications of the new legislation unfold.